What will be the repercussions of such an action by the fed

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Reference no: EM13242531

Suppose the Fed has initiated an expansionary monetary policy by using $25 billion in newly printed money to buy government bonds from bond holders (the public). What will be the repercussions of such an action by the Fed with regard to the following:

1. The interest rate (is interest rate expected to increase or decrease?)

2. Bond holders (are bond holders expected to buy or sell bonds?)

3. Borrowers (are borrowers expected to borrow more or less?)

Reference no: EM13242531

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